Representatives for Three Arrows Capital (3AC) have asked a U.S. bankruptcy court in Manhattan to force the cryptocurrency hedge fund’s founders to participate in the liquidation proceedings, saying they can’t be located and have blown off requests for necessary information
This is an example of the difficulties brought on by the influx of cryptocurrency companies filing for bankruptcy. Not only has this bankruptcy put other lenders of cryptocurrency on unstable ground, but it uncovers the real risk that cryptocurrency owners will be unable to retain their assets in the event of bankruptcy. The growing fear in this proceeding is that the uncooperative founders of the cryptocurrency company will stash away the assets of the company making the liquidation process moot.
The liquidators said [3AC’s founders] have not yet begun to cooperate in the liquidation effort, and that they are not only concerned about delays to their work, but the “actual and imminent risk” that the founders or other parties will whisk away 3AC’s cryptocurrency assets.
Source: Three Arrows liquidators asks U.S. court to force crypto founders to cooperate | Reuters